GBP posts a rebound after US data release

GBP has rebounded after declining yesterday against USD due to rising US bond yields bolstering the Dollar. Sterling has edged up by 0.17% today, following a drop of over 0.5% yesterday, reaching a low of $1.2683, before the Dollar gained support, Sterling had been trading at one-month highs against the US Dollar. The Dollar's resurgence was driven by rising treasury yields, strong economic data, comments from Fed officials, and weak bond auctions.

Currency markets have been battling with robust US economic data and improved consumer sentiment, which has raised questions around the timing of interest rate cuts from other developed markets. Strong US figures, along with better than forecasted UK growth and inflation readings have caused currency markets to temper their bets on a Bank of England rate cut to just a single reduction between now and the end of year.

The anticipation of higher interest rates for an extended period has bolstered the pound, enabling it to reach its highest level against the euro since for over two years on Wednesday.

It remained stable against the single currency on Thursday, currently at 1.1753.

There are minimal indications thus far that the UK election campaign is influencing the markets, with analysts suggesting that inflation and central bank interest rate policy remain the primary driving forces.

‍